Ivaylo Iliev

BBE 1 -> Introduction to law

DCFR articles covered by lecture and some explanations
Contractual freedom
1) II. – 1:102(1). “Parties are free to make a contract or other juridical act and to
determine its contents, subject to any applicable mandatory rules.”
a) “Each party is free to contract and to choose who will be the other party.
The parties are free to determine the content of the contract and the rules of form
which apply to it. Freedom of contract operates subject to compliance with
mandatory rules”.( II. – 7:302 - adds more )
b) Art. 0:101 -> A right, obligation, or contractual relationship may be varied or
terminated by the agreement at any time (You can change the term/conditions
at any time if the other party is also okay with the changes)
c) Art. 0:103. The second paragraph of this article adds that unilateral revocation
is effective only in the case of contracts of indeterminate duration.
d) Caveat: “The only caveat is that the agreement should not impose costs on
third parties (externalities). This is why in most systems certain contracts which
are likely to have detrimental effects on third persons are rendered void as a
matter of public policy.”

2) II. – 7:301: Contracts infringing fundamental principles

a) A contract is void to the extent that:
i) it infringes a principle recognized as fundamental in the laws of the
Member States of the European Union; and (it is illegal, immoral, contrary to
good faith, or harming other parties_
ii) nullity is required to give effect to that principle
3) II. – 7:302: Contracts infringing mandatory rules
a) Where a contract is not void under the preceding Article but infringes a
mandatory rule of law, the effects of that infringement on the validity of the
contract are the effects.
i) Either validity or change in the contract is applied
4) II. – 2:101: Right not to be discriminated against
a) A person has a right not to be discriminated against on the grounds of sex or
ethnic or racial origin in relation to a contract
5) II. – 2:102: Meaning of discrimination
a) One person is treated less favorably than the other. There is direct and indirect
discrimination. Goes with the above one II. – 2:101
6) II. – 2:103: Exception
a) If the discrimination is justified by a legitimate aim, or if the means used to
achieve that aim are appropriate and necessary
7) II. – 2:104: Remedies
 a) Any remedy granted should be proportionate. Different types of remedies are
possible -> DAMAGES, termination

1) II. – 3:101: Duty to disclose information about goods, other assets, and services
a) Disclose the information needed and expected by the other party
2) II. – 3:102: Specific duties for businesses marketing to consumers
a) To not provide misleading information
3) II. – 3:103: Duty to provide information when concluding contract with a consumer
who is at a particular disadvantage
a) The business should provide all the information needed at a reasonable time
before the decision is made.
4) II. – 3:107: Information about price and additional charges
a) Provide the other party with information about prices
5) II. – 3:108: Information about address and identity of business
a) What is stated above

1) II. – 3:301: Negotiations contrary to good faith and fair dealing

a) A person is free to negotiate and is not liable for failure to reach an agreement.
2) II. – 3:302: Breach of confidentiality
a) (1)Confidential information is only shared between parties
b) (3) If you do not negotiate out of good faith, you may receive a court order
c) (4) If you share confidential information, you are liable for any loss caused to the
other party by the breach
3) II. – 4:101: Requirements for the conclusion of a contract
a) A contract is concluded if the parties intend to enter into a binding legal
relationship and reach a sufficient agreement
4) II. – 4:103: Sufficient agreement
a) Conditions on when an agreement is sufficient
1) II. – 4:201: Offer
a) Proposal to make a contract with an intention to get into a contract, and the offer
must be communicated to the other party
b) (3) -> Advertisements, commercials -> what is stated in the Advertisement is
considered an offer
i) Exceptions: II. – 4:202: Revocation of offer (4)
2) II. – 4:202: Revocation of offer
a) You can revolve from an offer if the offeree hasn't yet dispatched an
acceptance
b) Exceptions (3) and (2)
i) If it is stated that it is irrevocable
ii) FIX TIME
iii) If it was reasonable to assume the offer is irrevocable and the offeree
has acted in reliance on the offer
iv) (2) -> Offers to the public can be revolved the same way as they were
made
3) II. – 4:203: Rejection of offer
a) When rejection of an offer reaches the offeror, the offer lapses.
4) II. – 4:204: Acceptance
a) (1) Any form of statement or conduct by the offeree is an acceptance if it
indicates assent to the offer
b) Inactivity or silence DO NOT MEAN ACCEPTANCE
5) II. – 4:205: Time of conclusion of the contract
a) If an acceptance has been dispatched by the offeree (1)
b) the contract is concluded when notice of the conduct reaches the offeror (2)
c) the offeree may accept the offer by doing an act without notice to the offeror (3)
6) II. – 4:206: Time limit for acceptance
a) if it reaches the offeror within the time fixed by the offeror
b) if it reaches the offeror within a reasonable time if no time limit was places
c) If an act is performed and the OFFEROR EXPECTS IT
7) II. – 4:207: Late acceptance
a) (1) -> if the offeror accepts the acceptance of the offeree
b) If the offer would have been accepted in normal time if there was no delay and IF
THE OFFEROR HAVE NOT INFORMED THE OFFEREE OF THE ELAPCE OF
THE OFFER
8) II. – 4:208: Modified acceptance
a) A reply with additional or different terms added/changed
b) A reply to an offer is considered ACCEPTANCE if it ALTERs the terms/conditions
in a NON_MATERIAL WAY
 c) However, such a reply is treated as a rejection of the offer if
i) It alters the terms in a material way
ii) It limits the acceptance ( this or nothing)
iii) The response from the offeror does not reach the offeree in a reasonable
time
9) II. – 4:209: Conflicting standard terms
a) If parties reach an agreement but the acceptance and the offer refer to conflicting
standard terms, STILL A CONTRACT IS FORMED.
b) Knock-out rule -> If the standard term is common in substance, then it is made
part of the contract. If 2 if there are conflict rules, they KNOCK OUT each other
and DEFAULT RULES APPLY
c) However, no contract is formed if one party
i) One party notifies the other in advance
ii) without undue delay, informs the other party of such an intention.
10) II. – 4:210: Formal confirmation of contract between businesses
a) If businesses have concluded a contract but have not embodied it in a final
document, and one sends a notice in textual form on a durable medium that it
accepts, but which contains additional or different terms, such terms become part
of the contract unless:
i) the terms materially alter
ii) the addressee objects to them without undue delay (без да се бави)
11) II. – 4:105: Modification in certain form only
a) All modifications must be IN WRITING (non-oral modifications can be reserves
(отменени)
1) REPRESENTATIVE
2) II. – 6:102: Definitions
a) They have the authority to affect the principles' LEGAL position
i) (if they act in the name and behalf and within the scope of authority
granted - not in this rule but II. – 6:105:)
b) “Acting without authority” -> includes acting beyond the scope of the authority
granted
3) II. – 6:103: Authorisation
a) Can be granted by the principle, by law,
b) It can be expressed both implicitly and explicitly
c) Make the other party BELIEVE/KNOW you are the representative
4) II. – 6:104: Scope of authority
a) It is determined by the principle.
b) You can do all the necessary things to achieve the goal
c) The representative has the right to give authority to another person, who will ACT
ON THE NAME AND BEHALF OF THE PRINCIPAL, not the representative
5) II. – 6:105: When a representative’s act affects principal’s legal position
a) When the representative acted in name and on behalf of the principal. The
representative is not part of the legal contract between the third party and the
principle
6) II. – 6:106: Representative acting in own name
a) If he acts out of his own name, the act affects the legal position of the
representative in relation to the third party as if done by the representative in
a personal capacity. It does not affect the principles legal position
i) For example, you don’t mention that you are here to represent someone
else
7) II. – 6:107: Person purporting to act as representative but not having authority
a) The act does not affect the legal position of the purported principal.
i) Though it can give rise to legal relations between the unauthorized
person and the third party
b) If ratification is not granted by the principle to the representative, the
representative is liable to pay the third-party damages
i) II. – 6:111: Ratification
c) EXCEPTION: If the third party KNEW of the lack of authority the representative
had
1) II. – 7:201: Mistake
a) If the party would not have conducted the contract or would have done so only on
fundamentally different terms and the other party knew or could reasonably be
expected to have known this
b) If the third party knew there was a mistake/misunderstanding from the other
side BUT DID NOT CORRECT IT.
c) Failing to comply with a pre-contractual information duty (II. – 7:202 - who is to
blame)
d) Made the same mistake
i) EXCEPTIONS
(1) the mistake was inexcusable
(2) The other party knew of the risk and took it
2) II. – 7:202: Inaccuracy in communication may be treated as a mistake
a) The person who made or sent the inaccurate statement is held liable

3) II. – 7:205: Fraud You intentionally did not correct me.

a) fraudulent misrepresentation, whether by words or conduct, or fraudulent
non-disclosure of any information which good faith and fair dealing, or any
pre-contractual information duty, required that party to disclose
b) The misrepresentation is fraudulent if it was purposely made wrong and with the
intention to induce the other party to make a mistake
c) Good faith and fair dealing (circumstances should be taken into account)
i) whether the party had special expertise;
ii) the cost to the party of acquiring the relevant information;
iii) whether the other party could reasonably acquire the information by other
means; and
iv) the apparent importance of the information to the other party

4) II. – 7:206: Coercion or threats

a) If you used coercion or threads (I will harm you)which it is wrongful to inflict, or
wrongful to use as a means to obtain the conclusion of the contract
b) If the other party had alternatives, those threads are NOT regarded as inducing
5) II. – 7:207: Unfair exploitation
a) One party is weak the other party is strong and it takes advantage of the weaker
side
i) If the weak party was in economic distress or had urgent needs, was
improvident, ignorant, inexperienced and
ii) The stronger party knew and exploited the first party’s situation by taking
an excessive benefit.
b) Solutions
i) a court may if it is appropriate to addapt the contract as if both parties
were equally strong

6) AVOIDANCE
7) II. – 7:209: Notice of avoidance
a) ONLY BY NOTICE OF THE OTHER PARTY
8) II. – 7:210: Time
a) Within a reasonable time (depends on the given country's national laws)
9) II. – 7:211: Confirmation
a) Writing, orally or by conduct and that it reaches the other party
10) II. – 7:214: Damages for loss
a) A party who has the right ot avoid the contract (or had them but lost it due to time
limits) is entitled to damages from the other party for any loss suffered as a result
of the contract (not more than the damage caused) IF THE OTHER PARTY
KNEW OR COULD BE EXPECTING THE GROUND FOR AVOIDANCE.
1) II. – 9:101: Terms of a contract
a) Tacit(мълчаливо) or express agreement.
i) Als standard conditions are applied if no specific solution is given
ii) The court may provide a solution to an unforeseen or forgotten problem
by giving a solution that is based on what would have the parties agreed
upon if they had tough about it
b) EXCEPTION: IF THE PARTIES INTENTIONALLY LEFT THE PROBLEM
WITHOUT A SOLUTION
2) II. – 9:102: Certain pre-contractual statements regarded as contract terms
a) Generally NO, but it can be regarded as a term of the contract if the other party
reasonably understood it AS PART OF THE CONTRACT. (circumstances are
important!!!)
b) If the statement is connected with what is supplied by this
business/service/product, the statement is understood as part of the term,
unless the other party KNEW that the statement is incorrect or the statement
had no influence on the other party’s decision to conclude the contract.
c) A statement made for advertising or marketing is treated as if made by the
business
d) A statement made to the public is treated as being made by the business unless
the business DID NOT KNOW OF THE STATEMENT IS INCORRECT
e) If (4) is the case, the business is not held liable for the damages caused.
3) II. – 9:104: Determination of price
a) On the basis of agreed terms
b) Determined by the NORMAL/DAY-TRADING PRICE at the time of the
conclusion of the contract
c) Or reasonable price

1) III. – 1:102: Definitions

a) Duty of the debtor to perform what he owes to the creditor
b) Performance of an obligation -> do what is done or not do what is not to be done
c) Non-performance of an obligation is any failure to perform the obligation,
WHETHER OR NOT EXCUSED, delayed performance, or defective performance
(not in accordance with terms of the contract)
d) (5) -> non-performance depend on the type of contract and contractual terms
i) ACHIEVE A PARTICULAR RESULT (STRICT SENCE - we guarantee
there won’t be any malfunction)
 ii) Obligation to make REASONABLE EFFORT (we will do what we can to
fix every problem that comes along)

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Lesson 2
1) II. – 8:101: General rules
a) To be interpreted according to the common intention of the parties
b) If one party intended the contract or a term or expression used in it, to have a
particular meaning, and the other party Kne/could be expected to know, this term
is interpreted in the way intended by the first party
c) BUT a contract is to be interpreted the way a reasonable person would
interpret it (more objective interpretation)
i) if an intention cannot be established
ii) If there is a question that arises with an outside party(not part of the
contract), or when a person who has reasonably and in good faith
relied on the contract’s apparent meaning.
2) II. – 8:102: Relevant matters
a) In interpreting the contract, regard may be had, in particular, to
i) the circumstances including preliminary negotiations (important to
keep the process of how a document was created (emails, changes,
offers made etc)
ii) The conduct (поведението) of the parties
iii) Previous interpretations of the contract
iv) Commonly given meaning to clauses in the branch of activity (отрасъл на
тяхната дейност)
v) the nature and purpose of the contract -> why was it created
vi) Usages
vii) Good faith and fair dealing
b) If a question with an outsider arises, clauses (a),(c) can be applied to the extent
that those circumstances were known to, or could reasonably be expected
to have been known to, that person
3) II. – 8:103: Interpretation against supplier of term or dominant party
a) When the meaning of a term is unclear an interpretation of the term against the
party who supplied it is to be preferred
b) If a clause was established under the dominant influence of one party, an
interpretation AGAINST that party is to be preferred
i) If the party X says, you can supply but on OUR terms, and there is a
problem, the interpretation is AGAINST party X
4) II. – 8:104: Preference for negotiated terms
a) If we agree that standard term applies, but also we negotiated on individual terms
that contradict with the standard one, the INDIVIDUAL terms are VALID
5) II. – 8:106: Preference for interpretation which gives terms effect
 a) An interpretation which renders the terms of the contract
lawful(законоцъобразно), or effective, is to be preferred to one which would
not.
6) II. – 8:107: Linguistic discrepancies
a) If a contract document is in two or more language versions, and there are
discrepancies, it should be interpreted n according to the version in which the
contract was originally drawn up.

Book III Obligations and corresponding rights

1) III. – 1:103: Good faith and fair dealing
a) Act in accordance with good faith and fair dealing when
i) performing an obligation
ii) exercising a right to performance
iii) defending a remedy for non-performance
iv) right to terminate an obligation
(1) Example: If one party faces difficulties in delivery, it MIGHT be
contrary to good faith and fair dealing to put pressure on them
2) III. – 1:104: Co-operation
a) The debtor and creditor are obliged to co-operate to the extent that this can
reasonably be expected
3) III. – 1:105: Non-discrimination
a) Chapter 2 of Non-discrimination applies + add ups
i) the performance of any obligation should provide access to goods, other
assets, or services that are available to members of the public
ii) The right to perform such obligation or defend of any remedy for
non-performance
iii) right to terminate

4) III. – 2:101: Place of performance (where the gods should be delivered?)

a) If a place whereof performance of an obligation cannot be determined then:
i) monetary obligation -> creditor’s place of business
ii) Anything else -> debtors place of business
(1) (2) and (3) -> not covered
5) III. – 2:102: Time of performance
a) If no time has been specified, then the obligation must be performed within a
reasonable time after it arises
b) If it can be determined
i) An obligation may be performed at any time within that period chosen by
the debtor unless the circumstances of the case indicate that the
creditor is to choose the time
6) III. – 2:103: Early performance
a) May be rejected unless the early performance would NOT cause the creditor
unreasonabl prejudice.
 b) Acceptance of early performance does not affect the time for the reciprocal
performance
i) If you deliver early and I accept it, this does not mean I have to pay you
now. I can pay you within the time period we AGREED up (it does not
change)
7) III. – 2:107: Performance by a third person
a) Where PERSONAL performance by the debtor is NOT REQUIRED, then the
creditor cannot refuse performance by the third party if:
i) acts with the assent of the debtor
ii) The 3rd party has a legitimate interest in performing and the debtor
cannot perform at the time performance is due.
b) Performance by a third person discharges the debtor. The 3rd party may take
over the creditor’s right by assignment or subrogation (?)
8) III. – 2:108: Method of payment
a) Any method used in the ordinary course of business
b) A creditor who accepts a cheque or other order to pay does so with the idea that
it will be honored (изпълнено)
9) III. – 2:109: Currency of payment
a) payment is to be made only in a specified currency
b) If no specific currency is determined, payment can be made in another currency
but according to the rate of exchange prevailing there at the time when payment
is due
c) If the debtor fails to pay at at the time when payment is due, the credit can
choose e rate of exchange prevailing (either the current or when the payment
was due)
10) III. – 2:111: Property not accepted
a) If a person has an obligation to deliver or return corporeal property, but the
creditor fails to accept or retake it, the person has obligation to protect and
preserve it
b) The debtor may obtain DISCHARGE from this obligation if
i) It deposits the property to a third person to be held to the order of the
creditor and notifies the creditor
ii) Sells the property after notice to the creditor and pays the net proceeds
to the creditor
c) If it deteriorates or its preservation is unreasonably expensive, the debtor has an
obligation to sell it. The debtor receives the discharge from the obligation to
deliver/return if he pays the net proceeds to the creditor
11) III. – 2:112: Money not accepted
a) The debtor may discharge from the obligation to pay by depositing the
money to the order of the creditor in accordance with the law of the place
where payment is due
1) III. – 3:101: Remedies available
a) If non-performance is not excused (III. – 3:104), the creditor has the right to
i) Withhold performance of a reciprocal obligation
ii) Terminate the contract (III. – 1:108, III. – 1:109, III. – 1:110)
(1) There you find the rules as to variations or termination of
agreement
iii) Price reduction
iv) SPECIFIC PERFORMANCE
v) DAMAGES
b) If the debtor’s non-performance is excusable(III. – 3:104), the creditor has the
right to
i) Withhold performance of a reciprocal obligation
ii) Terminate the contract
iii) Price reduction
c) If the creditor caused the no-performance, no remedies can be claimed
2) III. – 3:102: Cumulation of remedies
a) Remedies that are not incompatible, can be combined
3) III. – 3:103: Notice fixing additional period for performance
- (not here but delayed performance =/= FUNDAMENTAL performance)
a) The creditor may by notice to the debtor allow an additional period of time for
performance
b) creditor may withhold performance and may claim damages BUT NOTHING
ELSE
c) If the debtor cannot/does not perform within the additional period granted,
the creditor may resort to any available remedy
4) III. – 3:104: Excuse due to an impediment
a) If the Impediment was beyond the debtor’s control and if the debtor could not
have avoided or overcome the impediment.
b) Non-performance is not excused if the debtor could reasonably be expected to
have taken the impediment into account
c) Where the excusing impediment is permanent the obligation is extinguished
d) The debtor has to notify the creditor of such impediment in REASONABLE TIME
after the debtor knew of these circumstances. If not done, the creditor has the
right to claim remedies
THOSE RULES ARE CONNECTED WITH THE REMEDIES AVAILABLE -> TERMINATION
1) III. – 1:108: Variation or termination by agreement
a) If both parties agree on a right, the obligation can be varied/terminated
b) Where the parties do not regulate the effects of termination, then
i) If one has to pay for non-performance, it still has to pay for it
ii) It does not act as a settlement of disputes
2) III. – 1:109: Variation or termination by notice
a) A right, obligation, or contractual relationship may be varied or terminated by
notice where this is provided for by the terms regulating it (if the contract
allows it)
b) If the contract is for an indefinite period, then the contract can be terminated by
either party by giving a reasonable period of notice
c) Where the parties do not regulate the effects of termination, then (same as III. –
1:108)
i) If one has to pay for non-performance, it still has to pay for it
ii) It does not act as a settlement of disputes
3) III. – 1:110: Variation or termination by the court on a change of circumstances
a) An obligation must be performed even if performance has become more onerous
b) But if a unilateral juridical act becomes so onerous because of an exceptional
change then unjust to hold the debtor to the obligation, and the court may
i) vary the obligation in order to make it reasonable
ii) terminate the obligation
iii) It can be changed if the circumstances CHANGED AFTER the
agreement was made
1) III. – 3:301: Enforcement of monetary obligations
a) The creditor is entitled to recover money payment of which is due (може да си
взвърне надлъжно плащане)
b) The creditor can still perform its monetary obligation even if the debtor in the
monetary obligation will be unwilling to receive performance, and s proceed
with performance and may recover payment unless:
i) The creditor could have made substitute transaction without
significant effort
ii) Performance would be unreasonable
2) III. – 3:302: Enforcement of non-monetary obligations
a) The creditor is entitled to enforce specific performance of an obligation other
than one to pay money
i) If you do not deliver by today please do by tomorrow, next week, etc.
b) Specific performance includes the remedying free of charge
i) Adding specific performance should not cost you money if it is not in
conformity with the contract
c) Specific performance cannot, however, be enforced where
i) unlawful or impossible
ii) unreasonably burdensome or expensive
iii) Of such a personal character that it would be unreasonable to enforce it
d) f performance is not requested within a reasonable time after the creditor
knew of the non-performance, the right to enforce specific performance is
lost
e) If the creditor increased the loss or the amount of the payment by insisting
unreasonably on specific performance in circumstances where the creditor
could have made a reasonable substitute without significant effort
i) If insisting on specific performance caused you to LOSE way more than if
you made a substitute, then you are cannot recover damages for this
loss.
3) III. – 3:401: Right to withhold performance of a reciprocal obligation
a) The creditor can withhold performance of the reciprocal obligation until the
debtor has tendered performance or has performed
b) If the creditor believes in a non-performance by the debtor when the debtor’s
performance becomes due, the creditor withhold performance of the
reciprocal obligation for as long as the reasonable belief continues
1) III. – 3:502: Termination for fundamental non-performance
a) If non-performance is fundamental
b) It is fundamental if:
i) substantially deprives the creditor of what the creditor was entitled to
unless at the time of conclusion the debtor did not foresee and could
not reasonably be expected to have foreseen that result(exceptional)
ii) Gives the creditor reason to believe that the debtor’s future performance
cannot be relied on
2) III. – 3:503: Termination after notice fixing additional time for performance
a) If the creditor gave additional time for performance (because of late performance)
but the debtor does not perform within that period
b) If the period given by the creditor is UNREASONABLY SHORT, then the contract
can be terminated only after a reasonable period after notice
3) III. – 3:504: Termination for anticipated non-performance
- This is termination before the performance had taken place, how and why?
a) A creditor may terminate before performance of a contractual obligation is due if
the debtor has declared that there will be a non-performance, or it is clear
that there will be such a non-performance and it will be FUNDAMENTAL
4) III. – 3:506: Scope of right to terminate
a) If obligations are not divisible -> termination as a WHOLE
b) If in separate parts or are otherwise divisible, then
i) the creditor may terminate the contractual relationship so far as it relates
to that part
ii) Terminate as a whole IF the creditor cannot reasonably be expected to
accept performance of the other parts
5) III. – 3:507: Notice of termination
a) It is exercised by notice to the debtor.
b) And for (III. – 3:503: Termination after notice fixing additional time for
performance), provides for automatic termination
6) III. – 3:509: Effect on obligations under the contract (termination)
a) After termination any outstanding obligations of the parties under the contract
come to an end
b) It does not provide a solution to any provision of the contract for the settlement of
disputes
 c) A creditor who terminates under this Section retains existing rights to
damages or a stipulated payment for non-performance.
7) III. – 3:510: Restitution of benefits received by performance
a) If you have received benefits by the other’s performance of obligations under the
terminated contractual relationship, you are obliged to return them.
b) Payment received have to be repaid
c) If it is a transferable non-monetary benefit, it has to be returned. If it is too
expensive/effort, then the benefit may be returned by paying its value
d) If it is not transferable -> payment of its value
8) III. – 3:601: Right to reduce price
a) A creditor who accepts a performance not conforming to the terms
regulating the obligation may reduce the price.
b) If the creditor has already paid a sum exceeding the reduced price he can
recover the excess from the debtor
c) If you reduce the price, you CANNOT recover damages for the loss, but is
entitled to damages for any further loss suffered
1) III. – 3:701: Right to damages
a) The creditor is entitled to damages for loss caused by the debtor’s
nonperformance of an obligation unless the non-performance is excusable
b) includes future loss which is reasonably likely to occur
c) “Loss” includes economic(money) and non-economic loss(quality of life)
2) III. – 3:702: General measure of damages
a) A sum that would put the creditor as nearly as possible into the position in
which the creditor would have been if the obligation had been duly performed.
3) III. – 3:703: Foreseeability
a) The debtor is liable only for loss that the debtor foresaw at the time when the
obligation was incurred as a likely result of the non-performance UNLESS the
non-performance was intentional
4) III. – 3:704: Loss attributable to creditor
a) The debtor is not liable for loss suffered by the creditor to the extent that the
creditor contributed to the non-performance or its effects. \
5) III. – 3:705: Reduction of loss
a) If you could have LIMITED the Loss that you suffered, you SHOULD HAVE
DONE IT
b) The creditor is entitled to recover any expenses reasonably incurred in
attempting to reduce the loss
6) II. – 3:708: Interest on late payments\
a) The creditor is entitled to interest on that sum from the time when payment is due
to the time of payment
b) The creditor may in addition recover damages for any further loss.
_______
This is book 4 !!!!
Contract law -> sub-area of PRIVATE LAW and within contract law, you can make a distinction
between rules that APPLY GENERALLY to ALL contract, and rules that deal with SPECIFIC
CONTRACTS - subcategories such as service, selles, insurance etc
Parties are allowed to alter “propositions” by legislators and create new types of
contracts:

- People are allowed to come up with different types of SPECIFIC contracts and
layers role is to bring that contract into a specific category

1) IV. A. – 1:101: Contracts covered

a) sale of goods and associated consumer guarantees
b) It applies tо:
i) sale of electricity
ii) sale of stocks, shares, etc
iii) other forms of incorporeal (unmaterial) property
iv) industrial and intellectual property rights
v) Right to have information in exchange for money
vi) Software and databases
vii) Barter of goods
c) IMMOVEABLE PROPERTIES NOOOOO
2) IV. A. – 1:102: Goods to be manufactured or produced
a) One party undertakes, for a price, to manufacture or produce goods for the other
party and to transfer their ownership to the other party
3) IV. A. – 2:101: Overview of obligations of the seller
a) transfer the ownership
b) deliver the goods
c) ensure that the goods conform to the contract.
4) IV. A. – 2:201: Delivery
a) The seller fulfills the obligation to deliver by making the goods
b) If the contract involves carriage of the goods, the seller fulfills the obligation to
deliver by handing over the goods to a third party
5) IV. A. – 2:202: Place and time for delivery
a) III. – 2:101 and III. – 2:102
b) If the transfer of documents is required the seller should transfer them according
to the contract
c) If there are in-between carriers, the delivery should be done by the last carried in
the time mentioned or made available for collection from that carrier by that time
6) IV. A. – 2:301: Conformity with the contract (at the time when risk passes to the
buyer - not mentioned here)
a) The goods do not conform with the contract unless they:
i) quantity, quality, and description required
ii) contained or packaged in the manner required
iii) any accessories, installation instructions or other instructions required
iv) Comply with everything above
7) IV. A. – 2:302: Fitness for purpose, qualities, packaging
a) be fit for any particular purpose made known to the seller at the time of the
conclusion of the contract
b) Be fit to be used in the same way, as h goods of the same description are
c) possess the qualities of goods that the seller stated
d) be contained or packaged in the manner usual for such goods
e) be supplied along with such accessories, installation instructions or other
instructions as the buyer may reasonably expect to receive
8) IV. A. – 2:303: Statements by third persons
a) Statements about the product capabilities made by a person in earlier links of
the business chain, the producer or the producer’s representative must be
possess
9) IV. A. – 2:305: Third party rights or claims in general
a) The goods must be free from any right or reasonably well-founded claim of a third
party.
10) IV. A. – 2:307: Buyer’s knowledge of lack of conformity
a) The Seller is not liable under IV. A. – 2:302, IV. A. – 2:305, IV. A. – 2:306 if the at
the time of the conclusion of the contract, the buyer knew of the lack of
conformity
11) IV. A. – 2:308: Relevant time for establishing conformity
a) The seller is liable for any lack of conformity even after the lack of conformity
becomes apparent AFTER that time (IV. A. – 4:301:)
b) In a consumer contract -> 6 months
1) IV. A. – 3:101: Main obligations of the buyer
a) The buyer must:
i) pay the price;
ii) take delivery of the goods;
iii) take over documents representing or relating to the goods
2) IV. A. – 3:103: Price fixed by weight
a) In case of doubt, the net weight should be taken
3) IV. A. – 3:104: Taking delivery
a) Doing all the acts that enable the seller to perform the obligation to deliver
b) Takes over the goods + the documents if they are required by the contract

1) IV. A. – 4:301: Examination of the goods

a) The buyer should examine the goods within as short a period. Failure to do so
may result in the buyer losing, under III. – 3:107 (Failure to notify
non-conformity) as supplemented by IV. A. – 4:302 (Notification of lack of
conformity)
2) IV. A. – 4:302: Notification of lack of conformity
a) Should notify them, as stated in III. – 3:107 (Failure to notify non-conformity)
3) IV. A. – 4:304: Seller’s knowledge of lack of conformity
a) If the seller knew about the lack of conformity, he cannot rely on provisions of IV.
A. – 4:301 (Examination of the goods) or IV. A. – 4:302 (Notification of lack of
conformity), since he was already aware of that and did not DISCLOSE Them
with the buyer.
4) IV. A. – 4:201: Termination by consumer for lack of conformity
a) The buyer can terminate the contract under Book III, Chapter 3, Section 5
(Termination) in the case of any lack of conformity unless the lack of
conformity is minor.
5) IV. A. – 4:202: Limitation of liability for damages of non-business sellers
a) If the seller is a REAL person, he in not entitled to for lack of conformity
exceeding the contract price unless the SELLER KNEW OF THE LACK OF
CONFORMITY ->
 1) IV. A. – 5:101: Effect of passing of risk
a) Once the buyer TAKES OVER the good, any damage or loss does not free him
from paying
2) IV. A. – 5:102: Time when risk passes
a) The risk passes when the buyer takes over the goods or the documents
representing them
b) Until the goods are clearly identified to the contract
i) If I purchase in bulk until I examine that everything is according to the
contract, I do not TAKE over the risk
3) IV. A. – 5:103: Passing of risk in a consumer contract for sale (exceptions)
a) if the buyer has failed to perform the obligation to take over the goods and the
non-performance is not excused under III. – 3:104 (Excuse due to an
impediment)

Part D. Mandate contracts!!!!!?????????????

Part E. Commercial agency, franchise and distributorship
!!!!!?????????????
Unfair terms
1) II. – 9:401: Mandatory nature of following provisions
a) The parties may not exclude the application of the provisions in this Section or
derogate from or vary their effects. (MANDATORY RULES)
i) Additional:Terms which are not clear should be interpreted in the
favour of the customer
2) II. – 9:402: Duty of transparency in terms not individually negotiated
a) A duty to ensure that terms that are non individually negotiated are drafted and
communicated in plain, intelligible language
b) If in a contract between a business and a consumer there are terms supplied by
the business which were not communicated in plain, intelligible language, is
considered UNFAIR terms
3) II. – 9:403: Meaning of “unfair” in contracts between a business and a consumer
a) A term is unfair if it is supplied by the business and if it significantly
disadvantages the consumer, contrary to good faith and fair dealing
i) Example: The penalty clauses should be reasonable and equally
punishing for the CUSTOMER AND THE BUSINESS
4) II. – 9:404: Meaning of “unfair” in contracts between non-business parties
a) Only if it is a term forming part of standard terms supplied by one party and
significantly disadvantages the other party, contrary to good faith and fair
dealing
5) II. – 9:405: Meaning of “unfair” in contracts between businesses
a) Same -> if it is a term forming part of standard terms supplied by one party and
its use grossly deviate from good commercial practice
6) II. – 9:406: Exclusions from unfairness test
a) If those roles are part of the
i) International conventions to which the Member States are parties
ii) which are drafted in plain and intelligible language
(1) If they were communicated properly and the other agreed, nothing
can be done to change this fact
7) II. – 9:408: Effects of unfair terms
a) Not binding on the party who DID NOT SUPPLY IT
b) If the contract can be maintained without that rule, other rules are still valid
8) II. – 9:410: Terms which are presumed to be unfair in contracts between a
business and a consumer
 a) Many examples of when a term is presumed to be unfair

Right to withdraw
1) In which type of contract is this applicable
a) ONLY in B2C contracts that were:
i) Distance contract -> they were concluded from a distance
ii) Called calling -. Example and also a possibility
iii) When the BUSINESS COMES TO YOUR BASE.
2) What is the period when you can withdraw them? Consequences?
a) 14 days period and you do not have to give ANY reasons why.
b) NO LIABILITIES ARE INCURRED or any obligations from non-performance
c) You have to pay for the returning of the product but…
3) Policies
a) FREE-RETURN policies
b) If it is a service, you have to pay for the time when you benefited from it
4) Effects of this law
a) Many good stocks get destroyed due to the fact that they cannot be sold as
brand new, since they were RETURNED. NOT ECOFRIENDLY

___________________
Property law -> part of private law that deals with property ownership and other REAL RIGHTS

Real rights -> rights that are related to a PARTICULAR good and should be recognized
by EVERYBODY. They apply AGAINST everybody. They are PUBLICLY ANNOUNCED.

Important to know the difference

Economic ownership -> has substantially all the benefits and risks attached to a
fixed asset, regardless of whether that person is the legal owner
Legal ownership -> just legal perspective -. The one that ACTUALLY has the ownership
over the good

Protection of ownership
1) Generally protected by the government, (there are exceptions)
 a) Legislators cannot abolish ownership
i) It cannot say -. YOU NO LONGER OWN THIS THING
b) Protected against NATIONALISM
c) Exceptions
i) Based on a legal basis
ii) When there is compensation for the owner

1) VIII. – 1:202: Ownership (legal -> there are registers)

a) most comprehensive right a person can have over property,
b) exclusive right -> you can do ALMOST WHATEVER YOU WANT, and you can
prohibit EVERYONE from using the things you own
c) By almost is meant:
i) consistent with applicable laws or rights granted (VIII. – 1:204)
ii) If it does not affect the third party
2) VIII. – 1:205: Possession (it is factual, not legal -> No registers)
a) having direct physical control or indirect physical control over the goods
i) Direct -> exercised by possessor personally
ii) Indirect -> exercised by means of another person, limited-right-possessor
____________________________________________________________________________

Lesson 3
Reminder to add up
Ownership gives a REAL right ( right in REM - ( should be respected by everyone and it
affects EVERYONE).
Immoveable goods -> Changes made there are done by changes in the land register.

Background info
1) In France you can acquire ownership by
a) it is sufficient to have a MEETING of the minds
b) The moment you agree, then the TRANSFER OF ownership happens
i) The transfer of REAL right
c) NO DELIVERY NEEDED
d) Influenced by the FRENCH LAW of the 18th century, where the consensual
agreement was the only thing necessary
2) In Germany (ownership)
a) Meeting of the minds -> creates an obligation to pay/deliver the good)
b) the transfer will ONLY TAKE PLACE once the obligation to deliver is
performed
c) They constructed their law based on ROMAN LAW
i) Difference between the law of obligation and law of property
(1) To acquire ownership -> needs delivery
3) Switzerland (ownership)
a) In between (Like in the DCFR)
i) Delivery is required
4) ROMAN LAW (history)
a) Tradicio
i) At the start, Roman law was similar to german’s -> Delivery is needed, but
over time CONSTRUCTIVE POSSESSION was accepted
(1) This means the seller is a direct possessor of the goods, but he
possesses them “FOR” the buyer
(2) So transfer ow ownership was based on contracts
b) Will to transfer (obvious)
c) CAUSA -> this is the contract
Initial acquisition (Won’t focus on it)
VIII. – 4:101: Basic rule
a) Appropriation
b) Formation of new land
c) Ownership by continuous possession

1) VIII. – 2:101: Requirements for the transfer of ownership in general

a) The transfer of ownership of goods under this Chapter requires that:
i) the goods exist;
ii) the goods are transferable;
iii) the transferor has the authority to transfer the ownership;
b) The transferee is entitled to the transfer from the transferor
c) An agreement as to the time ownership is to pass +conditions of this
agreement are met
d) delivery or an equivalent to delivery
i) Should be based on what is stated in the contract
e) If in bulk, the transfer takes place when the goods are identified
i) (IV. A. – 5:102: Time when risk passes)
2) VIII. – 2:103: Agreement as to the time ownership is to pass
a) Ownership passes may be determined by party agreement
3) VIII. – 1:301: Transferability
a) All goods are transferable except where provided otherwise by law
b) prohibition of the transfer of goods by a contract -> NO EFFECT on their
transferability
4) VIII. – 3:101: Good faith acquisition through a person without right or authority to
transfer ownership
a) THIS IS AN EXCEPTION from the general rule, which is based on NATIONAL
LAW
i) The original owner can CLAIM its right of ownership even if all the
requirements below are met
b) When the transferor had no authority in transferring the good, the transferee
nevertheless acquires ownership provided that:
i) VIII. – 2:101: -> above one
(1) It exists, it is transferable and the transferee is entitled to receive it
 (2) DELIVERY
(3) FOR VALUE -> you pay for them
(4) Good faigt -> the transferee did not know for the lack of authority
from the transferer

Immoveable goods
1) VIII. – 2:101: Requirements for the transfer of ownership in general
a) It is the same as with moveable goods with few exceptions
b) They are not WRITTEN HERE (but could not find the code for immoveable
goods !!!!)
i) Delivery replaced by land register (very common
(1) Land register organized by state
(2) Land register produces publicly = trustworthy
(a) Ownership can be proved with the land register
ii) There are exceptions -> But won't go into details on them

1) Usufruct (Not in the DCFR)

a) REAL Right to use the property as an owner and keep any FRUITS that you
get from it (remember the definition !!!)
b) But it is NOT FULL OWNERSHIP (since you cannot destroy it)
c) Can be given for a limited period or a lifetime
i) For example -> parents donate the good to the children but keep the
USUFRUCT TO THEMSELVES
(1) The Children are the “owners” of the building, but the parents are
the ones entitled to the fruits produced by the house
(a) If it is given for rent, parents receive the money
ii) Even if there is a SALES AGREEMENT, if, in the contract, it is said that
one party is entitled to USUFRUCT, this means, this party will receive
the benefits of this property
d) You have to keep the property in a good state
e) When does it end??
i) It is determined by the contract
(1) There can be conditions that lead to termination !!
ii) DEATH !!! (important)
 2) Servitude (Again not in the DCFR)
a) Right of specific use of a piece of IMMOVEABLE property
i) In favor of another immovable property
(1) Like you use the property of the dominant piece of land to get to
another IMMOVEABLE PROPERTY (river, road, etc)
b) It is created by
i) Contract -. Agreements between the 2 parties
ii) Law
c) ENDS
i) !!!!!! -> DOES NOT END due to the death of the beneficiary
ii) It ends due to courth order
iii) Prescription -> If there are conditions to be met, and they are not met,
then the contract is terminated
iv) If One party acquires the other’s party immoveable property

Other real rights (in the DCFR)

3) IX. – 6:106: Recourse of third party security provider
a) This is connected with the personal security (remember the definition)
b) A security provider who is not the debtor of the secured right (a third party
security provider), pays the outstanding amount of the obligation covered by
the security
i) IV. G. – 1:101: Definitions ( in/dependent personal security)
(1) Dependent personal security
(2) Independent personal security
c) (Add up) -> disadvantage -> It relies on another person. If both are not able
to pay -> then they lose the contract
4) IX. – 1:103: Retention of ownership devices: scope
a) Ownership is retained by the owner of supplied assets in order to secure a right
to performance of an obligation
i) Ownerships remains with the seller until the debtor pays the price
b) IV. A. – 5:102 -> important about the risk part
c) (d) effect of fulfilling a security purpose
i) You do it to secure that he will do his job
5) IX. – 2:201: Retention of ownership devices
 a) I guess here it is stated that if the buyer goes bankrupt, the seller retains
ownership of the good (could not find it though) :(

TORT LAW (BOOK 6)

Definition ->
- Part of private law that establishes the principle of and provides rules in relation to,
non-contractual liabilities arising out of damages caused to another person (the name of
book 6)
- The basic rule you need to give a follow-up.

1) VI. – 1:101: Basic rule

a) A person who suffers legally relevant damage has a right to reparation from a
person who caused the damage, intentionally or negligently, or is accountable
for the damage done
2) VI. – 2:201: Personal injury and consequential loss
a) includes the costs of health care including expenses reasonably incurred for the
care of the injured person
b) including injury to mental health
3) VI. – 2:202: Loss suffered by third persons as a result of another’s personal injury
or death
a) (NON-ECONOMIC LOSS) ->If someone injures a person with how you have a
particularly close personal relationship, then there are egally relevant damage
4) VI. – 2:203: Infringement of dignity, liberty, and privacy
a) Privacy and reputation
5) VI. – 2:204: Loss upon communication of incorrect information about another
6) VI. – 2:205: Loss upon breach of confidence
a) The first deals with personal relations, the second with the business type of
communication. -. Connected with reputation
7) VI. – 2:206: Loss upon infringement of property or lawful possession
a) If the other party made actions with which it caused damage t your property,
stopped you from using that property or interfere with you using the property,
then there are
8) VI. – 2:210: Loss upon fraudulent misrepresentation
a) Misrepresentation -> I guess both reputation and advertisement
9) VI. – 2:211: Loss upon inducement of non-performance of obligation
Contract law vs tort law and tort vs criminal law (differences, no in the DCFR)
1) Contract law
a) Obligations and duties are taken VOLUNTARY
i) The obligations are DETERMINED by the PARTIES
ii) Complying with the agreement extinct the obligations
b) CONSENT of parties
i) Both agreed to it
c) Counterparty
i) KNOWN -> you chose it
d) The main purpose of the obligation is PERFORMANCE and GAINS
e) Remedies only in case of NON-PERFORMANCE
2) Tort law
a) Obligations are BY CHANCE
i) The obligations are DETERMINED BY LAW
b) NO CONSENT
c) Counterpart
i) Unknown and random, mostly a stranger
d) The main purpose is to remedies
i) Try to put a price on the damages done.
e) ________________________________
3) TORT LAW
a) PRIVATE LAW
i) Stays between the parties
b) Against another person
c) Leads to damages/compensation
i) The main idea is REMEDIES
d) NO STATE INVOLVED
i) If no one signals and goes to court, nothing will happen
e) CIVIL COURT
4) Criminal law
a) PUBLIC LAW
i) What happens in the criminal court everyone has access to it
b) Against PUBLIC interest
c) Leads to PUNISHMENT
i) Imprisonment, of other types of freedom punishments
d) STATE INVOLVED
i) Public authorities ACT
e) Criminal court
Usually, tort and Criminal cases are treated separately, but there are cases when there is
a combination of both
Punitive damages
1) They are not damages awarded as compensation for a tort caused but are used to deter
others from a similar conduct
a) The idea is to punish the other party with monetary compensation to stop them
from doing the same action again
b) And also as a SOCIETAL ->, if you act the same way as this individual did, you
will be subject to monetary punishment
2) Commonly used in the USA, but not known in EUROPE

Different approaches in tort law

1) General
i) French and Belgium
(1) You have a general rule that can be applied to an infinite amount
of cases that come close to them
2) Enumeration
a) England
i) Similar to the writs system -> You have particular clauses with particular
solutions to them.
ii) It is like a class of cases
3) Germany
a) A mix of the two
1) Aquilian liability (this is the general rules)
a) Comes from Roman law
i) A huge step in law.
(1) Before it was Eye-for-eye
(a) You kill my slave, I can kill yours
(2) Now with this law, there was a change
(a) MONETARY PAYMENT -> financial compensation
(3) With time it covered more cases, including if there was no
intention
b) Burden of proof
i) the plaintiff must produce the evidence in support of his claim
(1) The victim must prove tortious action
(2) Must prove that they suffered damages
(3) And that there was causation (this is the hard one)
(a) There is a link between the damage suffered and the
actions the other party made.
c) VI. – 3:101: Intention
i) A person causes legally relevant damage intentionally when that
person causes such damage.
(1) meaning to cause damage
d) VI. – 3:102: Negligence
i) A person causes legally relevant damage negligently when that person
causes the damage by conduct.
(1) does not meet the particular standard of care provided by a
statutory provision
(2) Does not provide the care, a reasonably expected person would in
such circumstances
e) VI. – 3:103: Persons under eighteen
i) e is accountable for causing legally relevant damage according to VI. –
3:102 (Negligence)
(1) Only part (b) -> Does not provide the care, a reasonably expected
person of that age would in such circumstances
ii) A person under seven years of age is NOT accountable for causing
damage intentionally or negligently
iii) do not apply to the extent that
(1) The person suffering the damage CAN NOT obtain reparation
(2) Reparation is possible and equitable (справедливо) given the
financial means and circumstances of the parties
f) VI. – 3:104: Accountability for damage caused by children or supervised
persons
 i) Parents or other persons obliged by law to provide parental care for a
person under fourteen years of age are accountable for the causation
of legally relevant damage
ii) An institution obliged to supervise a person is accountable for the
causation of legally relevant damage suffered by a third party when:
(1) the damage is a personal injury/property damage
(2) The person that caused the damage did so
intentionally/negligently
(3) The person that caused the damage was likely to do so
iii) NOT accountable if
(1) there was no defective supervision of the person causing the
damage
2) Simple casual liability (EXCEPTIONS to the previous chapter)
a) Liability without fault
b) In those cases, we pass the burden of proof to the defendant and assume the
victim is correct
i) Now the one who will be charged has to PROVE INNOCENCE

c) VI. – 3:201: Accountability for damage caused by employees and

representatives (find where we see that they can exstipulate themselves)
i) The employer is accountable for the causation of legally relevant
damage suffered by a third person when
(1) caused the damage intentionally or negligently
d) VI. – 3:202: Accountability for damage caused by the unsafe state of an
immovable
i) A person who independently exercises control over an immovable is
accountable for the causation of personal injury and consequential loss
ii) (3) -. The owner is the one to be regarded as independently
exercising control unless the owner shows that another independently
exercises control\
iii) (VI. – 3:208: Abandonment)
e) VI. – 3:203: Accountability for damage caused by animals
i) A keeper of an animal is accountable for the causation by the animal of
personal injury and consequential loss
f) VI. – 3:204: Accountability for damage caused by defective products
i) The producer of a product is accountable for the causation of personal
injury and consequential loss
ii) Or the person who imports the product in the EEA for sale, hire,
leasing or distribution in the course of that person’s business is
accountable correspondingly
iii) A person is not accountable if he shows that
(1) that person did not put the product into circulation
(2) The defect DID NOT exist at the time when the product was put
in circulation
(3) The defect is within the allowed range under MANDATORY
REGULATION
(4) The products were not manufactured for sale or distribution
purposes
(5) His technological/scientifical skills were not good enough to see
the defect
AGGRAVATED CAUSAL LIABILITY
- This is a liability for the CREATION of risks.
- When there is risk involved but the activity is allowed, any damage caused is
NON-EXCUSEABLE. !!!!!!!!
- No option for redemtion
1) VI. – 3:205: Accountability for damage caused by motor vehicles
a) Says the obvious thing
i) It refers to ANY motor vehicles
(1) Airlines // trains // cars etc …
b) Also liable for damage caused to property
2) VI. – 3:206: Accountability for damage caused by dangerous substances or
emissions
a) A keeper of a substance or an operator of an installation is accountable for
the causation by that substance or by emissions from that installation of
personal injury and consequential loss
i) However, a person is not accountable for if:
(1) He does not do it for purposes related to that person’s trade,
business or profession
(2) shows that there was no failure to comply with statutory
standards of control
CONSENT of the party that suffered risk
1) VI. – 5:101: Consent and acting at own risk
a) If the person suffering the damage KNEW about the risk and still did it
b) If the person taking the risk, knew and voluntarily took it (both say pretty much
the same stuff)
2) VI. – 5:102: Contributory fault and accountability (IMPORTANT)
a) If the person contributed in the suffered loss, then reparation is to be reduced
according to the degree of such fault
b) (Important) However, no regard is to be had to:
i) An insubstantial fault of the person
ii) The fault which has an insubstantial effect on the loss suffered
iii) the injured person’s want of care contributing to that person’s
personal injury caused by a motor vehicle in a traffic accident,
unless that want of care constitutes profound failure to take such
care as is manifestly required in the circumstances. (HAS NOT BE
COVERED SO DO NOT STUDY IT)
3) VI. – 5:202: Self-defence, benevolent intervention and necessity
a) A person has a defense if that person causes legally relevant damage in
reasonable protection of a right/person if the person suffering the legally
relevant damage is accountable for endangering the others
b) Where a person causes legally relevant damage to the patrimony of another in a
situation of imminent danger to life, body, health or liberty in order to save
the person causing the damage
4) VI. – 5:302: Event beyond the control
a) Act of god -> then the person has a DEFENSE

Causation
1) VI. – 4:101: General rule
a) if the damage is to be regarded as a consequence of that person’s conduct
b) In cases of personal injury or death, the injured person’s predisposition to such
injury or death should be disregarded.
2) VI. – 4:102: Collaboration
a) If you help the person causing legally relevant damage, you are also thought to
cause legally relevant damage
3) VI. – 4:103: Alternative causes
a) Every person that caused the legally relevant damage is rebuttably presumed to
have caused that damage
 1) VI. – 6:101: Aim and forms of reparation
a) Reparation is to reinstate the person suffering the legally relevant damage in the
position that person would have been in had the legally relevant damage
not occurred.
b) Can be in money or otherwise, as it is most appropriate
c) For tangible item, -> compensation equal to its depreciation of value, IF the
cost of repairs unreasonably EXCEEDED the depreciation
2) VI. – 6:102: De minimis rule
a) Trivial damage is to be disregarded ( minimum damage)
3) VI. – 6:103: Equalisation of benefits
a) The benefits of the injured person have to be disregarded unless:
b) The nature of the act, the kind of damage sustained, and whether the act was to
receive those benefits
i) In case of a death, the person suffering wanted to receive heritage
4) VI. – 6:105: Solidary liability
a) Where several persons are liable for the same legally relevant damage, they
are liable solidarily
5) VI. – 6:203: Capitalisation and quantification
a) is to be awarded as a lump sum unless a good reason requires periodical
payment
b) National law says something about it

____________________________________________________________________________
____________________________________________________________________________

LESSON 5
Not in the DCFR
1) A business organization can either be
a) A natural person engaging in economic activity
i) Sole trader
ii) You do not create a NEW ENTITY
(1) ENTREPRENEURSHIP
(2) You are the owner of all the business assets
(3) NO LEGAL DISTINCTION between your personal assets and
legal ones
(4) UNLIMITED LIABILITY
b) A legal person engaging in economic activity
i) You CREATE a NEW ENTITYwith intentions for “it” to do business
ii) The new entity has
(1) OWN RIGHTS
(2) OWN OBLIGATIONS
(3) NOT PHYSICAL
(4) OWN LIABILITIES + ASSETS
(a) It can come with UNLIMITED or LIMITED liabilities
Difference between company and assosiation
1) Company
a) Requirements
i) NEED 2 or more persons ->
(1) If they are natural persons
(a) They will be called PARTNERS!!!!
(2) If it is created with legal persons
(a) It is called CORPORATION
(i) Then people are called SHAREHOLDERS
ii) You need to make an INVESTMENT
(1) Monetary or in another kind (car, intellectual property, etc)
iii) You need a purpose/object
(1) Some kind of activity (like production)
(2) Its purpose is TO MAKE A RETURN
iv) TIP -> You can say PARTNERS/SHAREHOLDERS and not SPECIFY
which in it
2) Assosication
a) Again 2 or more persons needed
i) MEMBERS !!!!!
(1) Regardless of them being natural/legal persons
b) NO INVESTMENT NEEDED
c) Again you need a purpose/object
i) Achievement of a noble goal (not connected with profit)
ii) Making a break-even point is perfectly FINE
1) COMPANIES - different types
a) Partnership
i) WITHOUT legal personality + People in it are PARTNERS
ii) Based on an individual contractual agreement
(1) 2 legal personalities can CREATE PARTNERSHIP
(a) Like Mcdonald's and KFC creating a joint venture
(2) Or for example donations of shares
(a) You can create a contractual agreement where you
DONATE THE SHARES to another NATURAL person
but you keep your rights of making decisions in the
company. (there are limitations)
(i) Commonly used for transfer of ownership between
generations
iii) Fiscal transparency
(1) Both parties invest resources to create something
iv) RESTRICTED TRANSFER OF OWNERSHIP
(1) Only if ALL members agree to this transaction, then it will take
place
v) UNLIMITED LIABILITIES
(1) Personal and companies assets/liabilities are the same things
(2) From a legal perspective, they are classified as different, but
both are connected to ONE PERSON
(a) From an accounting point of view(balance sheet) there is a
distinction, from legal NO DISTINCTION
vi) Creditors
(1) A personal creditor can seize BOTH personal and companies
assets
(2) Companie creditor can seize BOTH personal and companies
assets
vii) TAXES
(1) Higher for partnerships than corporations
b) Corporations in general
i) Have legal personality
(1) INDEPENDENT RIGHTS/OBLIGATIONS from its
SHAREHOLDERS
(2) Makes contracts on its own, hires, fires people, sues and can be
sued ->everything a natural person can do
ii) Depends on capital investment
(1) Natural person invest in a company and in return receive shares
of the company
(a) The investment moves from the natural person to the
LEGAL ENTITY that was CREATED
iii) NEEDS ORGANS
(1) Needs people (directors) to act in the name of the corporation
when making any contracts.
(a) They SHOULD MENTION that they are there in the name
of this corporation
(i) Otherwise, the contract is between the other party
and the natural person
iv) INCORPORATION
(1) Notarial deed AND/OR REGISTRATION
v) TAXES
(1) There are personal income tax for the shareholders and
dividends but;
(2) CORPORATE TAX
(a) For the revenue of the LEGAL PERSON, which are much
LOWER => HIGHER PROFIT
vi) GROUPS/SUBSIDARY/BRANCHES
(1) A corporation may OWN the shares of other small companies
(a) We have 1 parent company and many daughter
companies
(b) Those dauther companies are called SUBSIDARY
(i) Subsidiaries have OWN LEGAL PERSONALITY
with OWN ASSETS/LIABILITIES but are controlled
by the parent company
(c) Branches/division
(i) They do NOT HAVE OWN LEGAL PERSONALITY
(ii) Simple offices located somewhere else
(2) If there is a problem with a stock for example, the client can go
and sue the
 (a) SUBSIDARY from which it bought the stock but not the
parent company itself
(b) Branches do not have legal personality, so there you
cannot sue them

c) Corporations with UNLIMITED liabilities

i) It has a LEGAL personality (not like in the partnership) but also
UNLIMITED LIABILITY (like the partnership)
(1) Suppose you create a private unlimited corporation and each
invest 10K. If the corporation goes bankrupt and it owes 100K, the
shareholders(you+others) have to pay for it with your PERSONAL
ASSETS
ii) PERSONAL CREDITORS
(1) Can seize personal assets but CANNOT seize corporation
assets
iii) Corporation CREDITORS
(1) First, seize CORPORATE ASSETS, but CAN ALSO seize
PERSONAL ONCES
d) Corporations with LIMITED liabilities
i) It has a LEGAL personality and LIMITED LIABILITIES
(1) Limited liability
(a) The corporation is EXCLUSIVELY liable for its own DEBT
(b) No connection with the shareholders
(2) Shareholder risks
(a) You can ONLY lose what you have initially invested but
NOTHING MORE
(i) Suppose you create a private limited corporation
and each invest 10K. If the corporation goes
bankrupt and it owes 100K, the shareholders are
not LIABLE for this debt and will not have to pay
MORE than what has initially invested
ii) Creditors of the corporation
(1) Can ONLY SEIZE COMPANIES ASSETS
(2) They have PRIORITY over the PERSONAL CREDITORS
iii) Personal creditors
(1) Can ONLY SEIE PERSONAL ASSETS
iv) SHARES
(1) ARE PERSONAL ASSETS, so they can be seized by the
personal creditor
(a) Though very hard to get a return due to many rules and
regulations
(b) You are ENTITLED TO MONEY, not control, so you
cannot use them as if you are the owner of the company
e) Corporations with LIMITED liabilities
i) Constrains and limitations
(1) Because the creditors bare most of the risk
(a) If the company goes bankrupt, they lose most of the
money, not the natural persons, who created the
company
(2) Minimum investment capital needed
(a) At least it was until recently
(3) Shareholders as residual owners
(a) First you pay your depth and what is left is divided between
the shareholders
(4) NOTARIAL DEEDS
(a) For LIMITED -> NEEDED, whereas unlimited do not need
it
(5) STRICT MANDATORY RULES that apply for limited liability
companies
(a) Accounting regulations for example
ii) (A side note)
(1) Depending on the market in which you operate, you might prefer
the unlimited liability company since this market does not have
mch risks involved
(a) Like assisting or teaching services
 1) PUBLIC COMPANIES
a) ONLY CORPORATIONS can be PUBLIC COMPANIES
b) Subject to STRICKER REQUIRMENTS
i) Capital and company structure generally
c) Only public companies are allowed to enter the stock exchange
d) No one cares who the owner of the share is
i) Not interested in the person, only in the investment
e) TRANSFERABILITY -> free
i) Eveyone can trade them
2) PRIVATE COMPANIES
a) Partnerships are ALWAYS PRIVATE
b) They are NOT closed companies, but are similar to them
c) Why private? The idea is:
i) So you can create a separate legal form that can have limited liabilities
but still be mostly controlled by the shareholders
ii) BUT:
(1) Transfer of shares is HIGHLY RESTRICTED
d) Those companies have less rules and requirements to meet
i) Flexible in terms of internal structure
e) Friendly for SMALL AND MEDIUM BUSINESSES

____________________________________________________________________________
ADD UP FROM lecture 2
Right to withdraw
1) II. – 5:101: Scope and mandatory nature
a) a party has a right to withdraw from a contract within a certain period
2) II. – 5:102: Exercise of right to withdraw
a) exercised by notice
b) No reasons need to be given
3) II. – 5:103: Withdrawal period
a) The withdrawal period ends fourteen days after
i) time of conclusion of the contract
ii) the entitled party receives from the other party adequate information on
the right to withdraw
iii) the time when the goods are received
b) The withdrawal period ends no later than one year after the time of conclusion
of the contract
4) II. – 5:104: Adequate information on the right to withdraw
a) Provide the needed information in the appropriate way on a durable surface
5) II. – 5:105: Effects of withdrawal
a) terminates the contractual relationship + obligations
b) Look III. – 3:510: Restitution of benefits received by performance
i) Any benefits received by the other party’s performance of obligation
should be returned
c) not liable to pay for
i) If it provided reasonable care to prevent damages
d) But is liable to pay for any diminution in value caused by normal use
e) In a B2C contract, if the business supply something of equivalent quality and
price in case what was ordered is unavailable, but the client still executes the
right to withdraw, the business PAYS the cost of returning the good
6) II. – 5:106: Linked contracts
a) If you exercises a right of withdrawal from a contract, any linked contract is also
affected
7) II. – 5:201: Contracts negotiated away from business premises
a) if the consumer’s offer or acceptance was expressed away from the
business premises.
b) Does not include
i) Vending machines
ii) contract concluded with telecommunications operators through the use of
public payphones
iii) sale of immovable property
iv) supply of foodstuffs, beverages intended for everyday consumption
supplied to the home
v) Action
vi) Travel insurance policies
c) Also (a) part is not apply if
i) f accommodation, transport, catering when there is a specific date
ii) If the services (non-financial) have begun at the consumer’s express
and informed request,
iii) When goods are made to the consumer’s specifications or clearly
personalised or deteriorate RAPIDLY
iv) the supply of audio or video recordings
v) gaming and lottery services
d) Also (a) does not apply for financial services ifboth parties fully performed their
obligations
8) II. – 5:202: Timeshare contracts
a) A right to use immovable property under a timeshare contract is entitled to
withdraw from the contract.
b) If he does use right to withdraw, the consumer has to
i) reimburse those expenses which have incurred as a result of withdrawal
from the contract or any legal formalities
ii) Look II. – 3:109: Remedies for breach of information duties
(1) If information is to be given to the consumer, the right to withdraw
DOES NOT collapse until this information is given, or after 1 year
iii) Are reasonable or mentioned in the contract
iv) The business cannot request any advance payments during the
period in which the latter may exercise the right of withdrawal
Add ups
1) Treefold compromise (lecture 1 harmonazation on EU level)
a) One between member states and between the national legal cultures/systems
b) It is always compromise between the EU LEVEL and the NATIONAL DINAMICS
i) Between the EU commission and the EU parliament and the council
which represents the 27 member states
c) Compromise between the Eu and different stakeholders
i) In drafting the rules you will always make some type of balancing
between the commercial agent you want to protect and the interest of the
principle

2) Consumer protection
a) You have in principle the 2 year period agains non-conformity and you are
entitled to certain remedies as a consumer in case of non-conformity but you
should proof that the non-conformity existed at the time of delivery
i) You buy a sellphone and it stops working 10 months later, then normally
you should proof that this defect was ALREADY there at the time of
delivery
(1) (this is not simple) -> there is a presumption period of 1 year
provided (also in the DCFR), if the defect becomes apparent until
1after year the delivery, it is presumed that the defect was there at
the time of delivery
3) Question 3
a) Where I sell my cellphone and I said as a payment period we agree 2 weeks and
it costs 800 euros, but we already agreed that I immediately deliver it to you even
if you havent paid
i) So I ask for propriety security, so then you propose as a kind of gentle
gesture I have a watch I will give you my watch as a security.
ii) And should I then not pay the 800 euro for the cellphone, you can then
sell my watch
iii) And if the watch is sold for MORE, like 1000, then I have to give back the
SURPLUS.
(continuation of the firms)
MAIN OBLIGATIONS OF A FIRM
1) Register in the national business register
a) An electronic database run by the STATE
b) Must register and file data for its unequivocal(недвусмислен) indentification
c) You receive a UNIQUE identification number
i) Should be used in ALL BUSINESS ACTS
2) Open a bank account
a) Mention the bank account on ALL INVOICES
3) Take on insurance
a) Mandatory
i) Insurances that are of such a nature that have HUGE RISKS involved,
like fire insurance or PROFFESIONAL LIABILITY (what is it)
(1) It is when you make a mistake, your insurance company can pay
the loss suffered by the other party
b) Non-mandatory
i) They do not have such risks or possibilities to arise very high liabilities
c) How does it work and what is insurance?
i) It is a cooperative devise that has a RISK-DISTRIBUTION element,
because identical risk is SPREAD among a huge number of persons
and with one party (the insurer) who coordinating them and offeing
coverage for the loss in case of accsiden, but the insured parties have to
pay premium on a fixed time period.
MAIN OBLIGATIONS OF A FIRM
4) To comply with social security law
a) Part of PUBLIC LAW ( between the state and the people)
b) It is the state offering protection/help/benefits in case of
i) Sickness, unemployment, work accidents
ii) Pensions, pre-retirement, invalidity benefits
iii) Family benefits (child help)
c) And it is funded with the TAX LAW
5) Tax law
a) Part of PUBLIC LAW ( between the state and the people)
b) What are taxes?
i) compulsory, unrequited payment to the government (задължителни,
безвъзмесдно плащане)
ii) Nothing specific in return
c) There are GENERAL BENEFITS (like the ine mentioned above)
i) Non-tax revenue
(1) When an individual REQURES a specific service offered by
the state
(a) Like paid highways
d) Who impose/collect taxes
i) The state (central government + regional/local government)
ii) But taxing power is limited by the constitution ->
(1) Each tax paid comes from a provision and the government is
also TAXES
(a) No arbitrary taxation (some pay 10%, other 20%)
(2) Tax laws are accepted only AFTER THEY HAVE BEEN VOTED
(3) Balance of powers
(a) Different branches for the creation, enforcement and
settlement of disputes regarding tax
(i) You can go to court and argue with the
administration when you do not agree with the tax
amount
e) Direct and indirect tax
i) Direct tax -> taxes that are identical for the same person (Income tax)
ii) Indirect rax -> taxes that fall on different persons, which generally thend to
shift the burden to another person ( VAT )
MAIN OBLIGATIONS OF A FIRM
6) Tax law (goals)
a) Revenue -> The state raises revenue for investment through taxes
b) Redistribution -> progressive taxes
c) Regulation -> of behavoiut
i) High taxes on cigarettes, oil, alcohol,
ii) Low taxes for mortgage, repair services
7) Obligation to register with the VAT authorities
a) Obligation to register with the VAT authorities in the EU country where your
business is established
i) VAT is paid at each stage but it is shifted until the good is sold to the
final consumer ( Firms do not PAY VAT)
ii) It is an INDIRECT TAX
iii) Funds the EU BUDGET
8) Obligation to issue invoices
a) Invoice IS NOT a contract
b) It is a document that confirms the existence of a DEBT, which results from
supplying goods/servises agains remuneration (плащане) аnd it is SEND to
the debtor
9) Obligation of keeping/publishing annual accounts
a) Keeping annual account +recording recipes and expenses
10) Obligation to pay income tax (direct tax)
a) Personal income tax
i) Tax levied on private persons + self-employed persons
b) Corporate tax
i) On companies
c) Progressive taxation
i) The more you earn, the higher % you pay
d) Flat rate taxation
i) Everyone pays the same rate regardles of income
MAIN OBLIGATIONS OF A FIRM
(Add up - why late payment is bad
- Chain reaction of payment problems
- Illequidity ( do not have money to operate with)
- It is exploited by big firms to crush small firms (we need STRICKTER RULE)

1) III. – 3:708: Interest on late payments

a) If payment of a sum of money is delayed, the creditor is entitled to interest
on that sum from the time when payment is due to the time of payment
b) The creditor may in addition recover damages for any further loss
2) III. – 3:709: When interest to be added to capital
a) is added to the outstanding capital every 12 months.
3) III. – 3:710: Interest in commercial contracts
a) If you delay payment and you are not excused by III. – 3:104 (Excuse due to an
impediment), interest is to be due at the rate specified in paragraph (4)
b) The interest from (4) starts to run on the day which follows the date or the end
of the period for payment provided in the contract
i) In case that the date is not specified
(1) 30 days after receiving the invoice or
(2) 30 days after receiving the final goods
c) The interest rate is specified here
d) The creditor may in addition recover damages for any further loss
4) II. – 3:711: Unfair terms relating to interest
a) (3) Something is unfair for the purposes of this Article if it grossly deviates from
good commercial practice, contrary to good faith and fair dealing. -> then
the DEBTOR DO NOT PAY
5) III. – 3:712: Stipulated payment for non-performance
a) Chekc -> III. – 3:104: Excuse due to an impediment
b) that a debtor who fails to perform the obligation is to pay a specified sum to the
creditor the creditor is entitled to that sum irrespective of the actual loss
c) the sum may be reduced to a reasonable amount where it is grossly
excessive in relation to the loss resulting from the non-performance
1) III. – 4:102: Solidary, divided, and joint obligations
a) Here we are given the difference between the 2 types of obligations
b) (1) An obligation is solidary when each debtor is bound to perform the
obligation in full and the creditor may require performance from any of them
until full performance has been received.
c) (2) An obligation is divided when each debtor is bound to perform only part
of the obligation and the creditor may claim from each debtor only the
performance of that debtor’s part.
2) III. – 4:106: Apportionment between solidary debtors
a) between themselves -> liable in equal shares
3) III. – 4:104: Liability under divided obligations
a) Debtors bound by a divided obligation are liable in equal shares.
Оutside DCFR

Contract law on commercial intermediaries

1) Largely national law (not harmonized)
a) Commercial agency, franchisee and distributors are treated differently
b) Commercial agents are in the best position here
c) Little support for franchisee and distributors
i) NO MANDATORY PROTECTION FOR THEM (while often needed)
ii) Problems when the supplier TERMINATES the contract
d) Suppliers have the stronger position and they DICTATES the RULES
2) Silo approach
a) Seperate distinct regimes that have different approaches when it comes to
problems between the supplier and the intermediaries
b) Problems with what SILO is USED (it DEPENDS)
i) Commercial agents -> in case of termination, they get HUGE
compensations since they grew the business in that area
ii) franchisee/ Distributors -> LITTLE TO NO COMPENSATION, hardly can
continue their business AFTER TERMINATION from the supplier
3) DCFR approach
a) The DCFR tries to make some new MODERNISE RULES that apply across the
board that apply to all
b) Tried to EVOLVE toward GENERAL regime (down are examples)
i) Pre-contractual information duty
ii) Obligations, co-operation, information exchange, confidentiality
iii) Common termination rules (similar to the other onces)

Disintermediation / Servitisation
- trend of suppliers to move from indirect -> DIRECT selling due to technological
advances.
MANDANE CONTRACTS (book D)
1) IV. D. – 1:101: Scope
a) An agent is instructed (mandated) by another person , the principle to
i) Conclude a contract with theird party IN THE NAME of the principle
ii) On behalf of the principle
iii) Take steps which are meant to lead to the conclusion of a contract
between the principal and a third party
b) It applies where the agent is to be paid a price but also if not
c) Does not apply for the relationship between the principle and the third party, or
the agent and the third party
d) Chekc IV. E. – 3:201 / IV. E. – 3:202 / IV. E. – 3:203
2) IV. D. – 1:102: Definitions
a) The mandate is the authorisation and instruction given by the principle
b) It gives authorisation of the agent to act
c) .
d) IMPORTANT -> mandate under which the agent is to act in the name of the
principal, or otherwise in such a way as to indicate an intention to affect the
principal’s legal position

(not sure if I have to go over them)

Section 1: Main obligations of agent

Section 2: Consequences of acting beyond mandate

Section 4: Obligation to inform principa

Chapter 5: Conflicts of interests

Chapter 6: Termination by notice other than for non-performance

Chapter 7: Other grounds for termination

(book E)

IV. E. – 1:201: Priority rules

a) the rules in this Part prevail over the rules in Part D (Mandate)
b) the rules in Chapters 3 to 5 of this Part prevail over the rules in Chapter 2 of this
Part.

Chapter 2: Rules applying to all contracts within the scope of this part
1) IV. E. – 2:101: Pre-contractual information duty
a) Has a duty to provide the other party, a reasonable time before the contract
is concluded and so far as required by good commercial practice, with such
information as is sufficient
2) IV. E. – 2:201: Co-operation
a) must collaborate actively and loyally and co-ordinate their respective efforts
3) IV. E. – 2:202: Information during the performance
a) each party must provide the other in due time with all the information which
the first party has and the second party needs
4) IV. E. – 2:203: Confidentiality
a) A party who receives confidential information from the other must keep such
information
Section 3: Termination of contractual relationship
1) IV. E. – 2:301: Contract for a definite period
a) Free not to renew a contract for a definite period. that it wishes to renew the
contract, the contract will be renewed for an indefinite period unless the other
party wishes other things
2) IV. E. – 2:302: Contract for an indefinite period
a) Either party to a contract for an indefinite period may terminate the contractual
relationship by giving notice to the other
b) If within reasonable time - no damages are paid under r IV. E. – 2:303,
otherwise there are damages paid
c) the rules in this Article replace those in paragraph (2) of III. – 1:109 (Variation
or termination by notice)
3) IV. E. – 2:303: Damages for termination with inadequate notice
a) Does not give a reasonable period of notice the other party is entitled to damages
b) damages is such sum as corresponds to the benefit which the other party would
have obtained during the extra period for which the relationship would have
lasted
4) IV. E. – 2:304: Termination for non-performance
a) A party may terminate the contractual relationship for non-performance which is
not fundamental is without effect
i) NON-Fundamental non-performance DOES NOT LEAD TO
TERMINATION
5) IV. E. – 2:305: Indemnity for goodwill
a) When the contractual relationship comes to an end, a party is entitled to an
indemnity (възнаграждение) from the other party for goodwill if and to the
extent that:
i) the first party has significantly increased the other party’s volume of
business
ii) the payment of the indemnity is reasonable
iii) Check IV. E. – 3:312
(book E - commercial agent obligations)
1) IV. E. – 3:201: Negotiate and conclude contracts
a) make reasonable efforts to negotiate contracts on behalf of the principa
2) IV. E. – 3:202: Instructions
a) Мust follow the principal’s reasonable instructions
3) IV. E. – 3:203: Information by agent during the performance
a) obligation to inform about:
i) contracts negotiated or concluded
ii) market conditions
iii) solvency of and other characteristics relating to clients (платежност)
4) IV. E. – 3:204: Accounting
a) maintain proper accounts relating to the contracts negotiated
b) t allow an independent accountant to have reasonable access to the agent’s
books upon the principal’s request

Principle obligations - commercial agent contract

5) IV. E. – 3:301: Commission during the agency
a) The commercial agent is entitled to commission on any contract concluded with a
client during the period covered by the agency if
i) The contract has been conducted
(1) as a result of the commercial agent’s efforts
(2) With previous client, which the commercial agent acquired
6) IV. E. – 3:302: Commission after the agency has ended
a) The commercial agent is entitled to commission on any contract concluded with a
client after the agency has ended if
i) the contract with the client is mainly the result of the commercial
agent’s effort
ii) IV. E. – 3:301 would have been satisfied if the agency had not ended
7) IV. E. – 3:303: Conflicting entitlements of successive agents
a) if a previous commercial agent is entitled to that commission under IV.E–3:302
the other commercial agent IS NOT entittled to commission
8) IV. E. – 3:304: When commission is to be paid
 a) Not later than the last day of the month following the quarter in which the agent
became entitled to it
9) IV. E. – 3:305: Entitlement to commission extinguished
a) On the basis that the client’s contractual obligations are not performed for a
reason for which the principal is not accountable

Principle obligations - commercial agent contract

10) IV. E. – 3:306: Remuneration
a) GIves no information whatsoever
11) IV. E. – 3:307: Information by principal during the performance
a) Principal in particular to provide the commercial agent with information
i) characteristics of the goods or services
ii) Prices
12) IV. E. – 3:308: Information on acceptance, rejection and non-performance
a) The principal must inform the commercial agent, within a reasonable period, of:
i) acceptance/regection of a contract which the commercial agent has
negotiated on the principal’s behalf;
ii) any non-performance of obligations under a contract which the
commercial agent has negotiated or concluded on the principal’s behalf
13) IV. E. – 3:309: Warning of decreased volume of contracts
a) The principal must warn the commercial agent within a reasonable time if he
foresees that there will be significantly lower than the commercial agent could
reasonably have expected
14) IV. E. – 3:310: Information on commission
a) This statement must set out how the amount of the commission has been
calculated
15) IV. E. – 3:311: Accounting
a) Must maintain proper accounts relating to the contracts negotiated or
concluded by the commercial agent
b) Must allow an independent accountant to have reasonable access to the
principal’s books
16) IV. E. – 3:312: Amount of indemnity
a) The commercial agent is entitled to an indemnity for goodwill on the basis of:
i) How to calculate it is mentioned
b) IV. E. – 2:305 - check it
Franchise
1) IV. E. – 4:101: Scope
a) The franchisor grants the franchisee the right to conduct a business within the
franchisor network, on the franchisee NAME AND BEHALF
i) You bear all the RISK, not the franchisor
b) The franchisee has the right and obligation to use the
i) Franchisor trademark/tradename (IV. E. – 4:201)
ii) Other IP rights
iii) KNOW-HOWS (IV. E. – 4:202)
iv) Business methods
c) The franchisor provides commercial, technical andlegal assistant (IV. E. – 4:203)
d) And this in exchange for REMUNERATION (заплащане)
2) IV. E. – 4:102: Pre-contractual information
a) requires the franchisor in particular to provide the franchisee with adequate
and timely information concerning (many things explained there)
b) If the franchisor non-compliance with paragraph (1) does not give rise to a
mistake( II. – 7:201 (Mistake)) , the franchisee is still entitled to damages ( II. –
7:214 (Damages for loss))
3) IV. E. – 4:103: Co-operation
Obligations of the franchisor
1) IV. E. – 4:201: Intellectual property rights
a) grant the franchisee a right to use the intellectual property rights
2) IV. E. – 4:202: Know-how
a) The franchisor must provide the franchisee with the know-how which is
necessary to operate the franchise business
3) IV. E. – 4:203: Assistance
a) assistance in the form of training courses, guidance and advice, in so far as
necessary
4) IV. E. – 4:204: Supply
a) When the franchisee is obliged to obtain the products from the franchisor, the
franchisor must ensure that the products ordered by the franchisee are
supplied within a reasonable time
5) IV. E. – 4:205: Information by franchisor during the performance
a) provide the franchisee with information concerning
i) market conditions
ii) commercial results
iii) characteristics of the products
iv) AND MORE
6) IV. E. – 4:206: Warning of decreased supply capacity
a) The franchisor must warn the franchisee within a reasonable time when the
franchisor foresees that there will be significantly less than the franchisee had
reason to expect
7) IV. E. – 4:207: Reputation of network and advertising
a) make reasonable efforts to promote and maintain the reputation of the franchise
network
b) design and co-ordinate the appropriate advertising campaigns aiming at the
promotion
Obligations of the franchisee
1) IV. E. – 4:301: Fees, royalties and other periodical payments
a) must pay to the franchisor fees, royalties
b) For unilateral agreement ( one party determines the price to be paid)
i) II. – 9:105: Unilateral determination by a party (check it)
(1) If the fees that were determined unilaterally are TOO HIGH, a
reasonable fees are to be determined
2) IV. E. – 4:302: Information by franchisee during the performance
a) The obligation under IV. E. – 2:202 ((Information during the performance)
requires the franchisee in particular to provide the franchisor with information
about
i) Claims, threats or infringement of property rights by a third party
3) IV. E. – 4:303: Business method and instructions
a) make reasonable efforts to operate the franchise business according to the
business method of the franchisor
b) must follow the franchisor’s reasonable instructions
4) IV. E. – 4:304: Inspection
a) must grant the franchisor reasonable access to the franchisee’s premises to
enable to enable for inspection
Distributorship
1) IV. E. – 5:101: Scope and definitions
a) One party, the supplier, agrees to supply the other party, the distributor, with
products on a continuing basis and the distributor agrees to purchase them, or
to take and pay for them

Obligations of the supplier

1) IV. E. – 5:201: Obligation to supply
2) IV. E. – 5:202: Information by supplier during the performance
a) The obligation under IV. E. – 2:202 (Information during the performance)
requires the supplier to provide the distributor with information concerning:
i) characteristics of the products
ii) prices and terms for the supply
iii) recommended prices
3) IV. E. – 5:203: Warning by supplier of decreased supply capacity
a) must warn the distributor within a reasonable time when the supplier foresees
that the supplier’s supply capacity will be significantly less than the distributor
had reason to expect
4) IV. E. – 5:204: Advertising materials
a) TO provide with (at a price) all advertising materials the supplier has which
are needed for the proper distribution and promotion of the products
5) IV. E. – 5:205: The reputation of the products
a) The supplier must make reasonable efforts not to damage the reputation of the
products.
Obligations of the distributor
1) IV. E. – 5:301: Obligation to distribute
a) make reasonable efforts to promote the products.
2) IV. E. – 5:302: Information by distributor during the performance
a) The obligation under IV. E. – 2:202 (Information during the performance)
requires the distributor to provide the supplier with information concerning:
i) Claims, threats or infringement of property rights by a third party
3) IV. E. – 5:303: Warning by distributor of decreased requirements
a) must warn the supplier within a reasonable time when the distributor foresees
that the distributor’s requirements will be significantly less than the supplier
had reason to expect
4) IV. E. – 5:304: Instructions
a) must follow reasonable instructions from the supplier which are designed to
secure the proper distribution of the products
5) IV. E. – 5:305: Inspection
a) Enable the supplier to check that the distributor is complying with the standards
agreed upon in the contract
6) IV. E. – 5:306: The reputation of the products
a) must make reasonable efforts not to damage the reputation of the products.